Do Falling Oil Prices Raise the Threat of Deflation?

The spectacular drop in oil prices means that inflation is going to fall even further below the Fed’s 2% target. Does that raise any new risks for the economy? I say no, and here’s why. Year-over-year percent change in the monthly deflator for personal consumption expenditures. Source: FRED. In economists’ theoretical models, inflation usually is […] View the full post at: Do Falling Oil Prices Raise the Threat of Deflation? Related posts: The Threat of an Arrogant Laboring Class Computer Prices Have Fallen By 90% Over the Last Ten Years: Is That Evidence of Monopoly Power? Inflation? Deflation? Or Some Of Eeach?